| Course | WMBA 6623 Enterprise and Project Risk Management |
|---|---|
| Week | Week 8 |
| Paper type | Contingency brief |
| Length | About 710 words, 4 pages |
| Format | Memo, APA 7 citations |
| School | Walden University |
| Program | Master of Business Administration (MBA) |
| Updated | October 2026 |
Free sample paper for WMBA 6623 Week 8
Memorandum
To: Steering Committee, Loan Servicing Consolidation, Lakeshore Community Bank
From: Project Manager
Date: October 19, 2026
Re: Risk reserve request
Request
Project: consolidation of loan servicing into the Grand Rapids operations center. Base budget: $4.8 million, plus $214,000 for the approved risk responses, for $5,014,000. Reserve requested: $700,000, about 14 percent of the base, divided into $425,000 of contingency held by the project manager and $275,000 of management reserve held by the sponsor. The bank and figures are composite.
Derivation
The reserve is built from the priced risks, not set as a percentage. The table carries forward the expected values from the quantitative analysis, which already assume the approved responses are in place.
Table 1
Expected Values Carried Into the Reserve
| Risk | Expected value | Share of total | Funded from | |
|---|---|---|---|
| R02, escrow analysis | $108,750 | 26.4% | Contingency | |
| R04, center staffing | $52,800 | 12.8% | Contingency | |
| R10, cutover escrow | $45,000 | 10.9% | Contingency | |
| R11, default files | $37,500 | 9.1% | Contingency | |
| R01, configuration | $36,000 | 8.7% | Contingency | |
| R07, vendor team | $31,500 | 7.6% | Contingency | |
| R05, early departures | $30,000 | 7.3% | Contingency | |
| R20, buildout | $27,000 | 6.5% | Contingency | |
| R06, payment routing | $15,000 | 3.6% | Contingency; tail in management reserve | |
| R13, paper files | $15,000 | 3.6% | Contingency | |
| R09, borrower notices | $14,000 | 3.4% | Contingency; tail in management reserve | |
| All eleven | $412,550 | 100% | Both reserves | |
From the quantitative risk analysis; costs are composite estimates.
Two adjustments follow. First, the three-point estimate for R02 gave a mean cost of about $470,000 rather than the $435,000 point estimate, adding about $8,750 to its expected value. Rounding the adjusted sum, about $421,300, gives the $425,000 contingency.
Second, the expected value treats R06 and R09 as costing $15,000 and $14,000. But they are low-probability events whose cost, if either occurred, would be about $300,000 or $280,000. A contingency built on expected values would cover neither. The PMBOK Guide distinguishes contingency reserves, for identified risks the project manager can draw on, from management reserves, held by management for situations the plan cannot fully anticipate (Project Management Institute, 2017). The $275,000 management reserve is sized to cover one such event beyond its share of contingency, together with a small allowance for unidentified risks.
Table 2
Reserve Split
| Reserve | Amount | Held by | Covers | |
|---|---|---|---|
| Contingency | $425,000 | Project manager | Identified risks R01 through R20, at expected value | |
| Management reserve | $275,000 | Sponsor | A tail event such as R06 or R09, and unidentified risks | |
| Total | $700,000 | Split as above | Identified and unidentified risk | |
The split follows the distinction between identified and unforeseen risk.
Why Not a Flat Percentage
A flat 10 percent of the base would give about $500,000, close to the total but with no basis for how it is held or used. Flyvbjerg (2006) found that projects estimated from the inside view of their own plans systematically underestimate costs, and the 2019 conversion, which ran 11 percent over budget, supports a reserve in this range. But a risk-based reserve tells the committee what the money is for, which a percentage cannot.
Kwak and Ingall (2007) note that simulation can show the probability of exceeding a given reserve. A simple simulation of the eleven risks, using the three-point ranges, suggests about an 80 percent chance that total risk costs stay below $700,000. The committee may choose a higher or lower confidence level; each $100,000 changes it by roughly six to eight percentage points.
The reserve is also a signal. A project that asks for nothing beyond its base budget implies that nothing will go wrong, which the 2019 conversion showed is unlikely. A reserve tied to named risks tells the committee where the project expects trouble and lets it watch those areas. It also gives the committee a basis for releasing money as risks retire.
Draw and Release Rules
The project manager may draw contingency for a listed risk up to $50,000 per event, reporting the draw at the next steering meeting. Larger draws need the sponsor's approval. Management reserve may be drawn only by the sponsor with the steering committee's agreement. Contingency for risks that are retired, for example R06 once the processor acknowledges notice, is released back to the bank at the following meeting rather than held for other uses. Draws and releases appear in every status report.
References
Flyvbjerg, B. (2006). From Nobel Prize to project management: Getting risks right. Project Management Journal, 37(3), 5-15. https://doi.org/10.1177/875697280603700302
Kwak, Y. H., & Ingall, L. (2007). Exploring Monte Carlo simulation applications for project management. Risk Management, 9(1), 44-57. https://doi.org/10.1057/palgrave.rm.8250017
Project Management Institute. (2017). A guide to the project management body of knowledge (PMBOK guide) (6th ed.).
WMBA 6623 Week 8 instructions, in plain terms
The contingency brief asks students to justify a risk reserve for a project. Instructors expect a memo of about two pages with a heading block naming the project, the base budget and the reserve requested. The first page should carry the derivation: a table of priced risks with expected values summed and an adjustment for events whose impact would exceed what the sum implies. A second table usually splits the total into contingency held by the project manager and management reserve held by a sponsor. Strong memos also explain why a flat percentage is not used and set rules for drawing and releasing reserves. The memo should state the confidence level the reserve provides and how that level would change with a larger or smaller request. Draw limits keep small risks fast and large ones visible.
How the WMBA 6623 Week 8 example is put together
The memo states the project, base budget and $700,000 request. A table carries forward eleven priced risks totaling $412,550. Two adjustments follow: the escrow line's three-point mean and the separate treatment of two rare, severe risks, with the PMBOK Guide's distinction between contingency and management reserve. A second table splits the reserve. A section compares a flat percentage, citing Flyvbjerg on underestimation, and reports a simulation's confidence level, citing Kwak and Ingall. A paragraph explains the reserve as a signal to the committee. Draw and release rules close the memo. Margin comments flag the heading block and the confidence choice. Both tables keep the same risk numbers used throughout the term.
WMBA 6623 Week 8 rubric: what earns full marks
Graders reward a reserve derived from priced risks rather than asserted as a percentage. A clear table of expected values and transparent adjustments show rigor. Distinguishing contingency from management reserve, and assigning each to the right holder, demonstrates governance. Explaining the confidence level the reserve provides adds depth. Rules for drawing and releasing reserves make the request manageable. A reserve figure that a finance committee could trace to individual risks, and a rule for releasing it, is what graders look for. Memos that tie the reserve request to named risks, so the committee knows what the money is for, show the strongest reasoning.
WMBA 6623 Week 8 help from the desk
Start from your priced risks and total their expected values. Then ask which risks would cost far more than their expected value if they occurred, and decide how to cover them. Split the total into money the project manager can use and money only the sponsor can release. Say how confident you are that the reserve is enough. Students often lose marks by requesting a round percentage, by putting all reserve under the project manager or by omitting draw rules. Another frequent gap is ignoring how reserves are returned when risks pass. For a custom sample contingency brief, send us your priced risk table.
Get a WMBA 6623 Week 8 example written to your instructions
Drop the Week 8 prompt and its rubric into the request form, with the budget figure your scenario uses, and the brief comes back deriving the reserve from priced exposure instead of a percentage. Release rules and signature levels are written out. No charge on a first sample, returned inside 24-48 hours.
More WMBA 6623 papers and MBA samples
- WMBA 6623 Week 1: Named Risk Discussion Post
- WMBA 6623 Week 2: Project Risk Identification Table
- WMBA 6623 Week 3: Project Risk Register
- WMBA 6623 Week 4: Qualitative Risk Scoring Matrix
- WMBA 6623 Week 5: Risk Score Challenge Replies
- WMBA 6623 Week 6: Quantitative Risk Analysis
- WMBA 6623 Week 7: Risk Response Plan
- WMBA 6623 Week 9: Risk Appetite Governance Memo
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WMBA 6623 Week 8 questions, answered
Where can I find a free WMBA 6623 Week 8 sample paper?
The contingency reserve brief for the loan servicing consolidation is printed in full below, reserve table included.
How much reserve is requested?
$700,000, about 14 percent of the base budget.
How is it split?
$425,000 of contingency held by the project manager and $275,000 of management reserve held by the sponsor.
Why a separate management reserve?
To cover rare, severe events whose cost far exceeds their expected value.
How confident is the reserve?
A simulation suggests about an 80 percent chance that risk costs stay within it.